* Silver rises to near 7-year peak
* Dollar falls to a near two-year low
* U.S. consulate in Chengdu closed as of Monday morning - China
* Interactive graphic tracking global spread of coronavirus: open tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Brijesh Patel
July 27 (Reuters) - Gold surged to record highs on Monday as an intensifying U.S.-China row and a weaker dollar sent investors scurrying to the safety of bullion to hedge against the risks to a global economy already reeling from the COVID-19 pandemic.
Spot gold rose 1.7% to $1,934.06 per ounce by 0802 GMT after hitting a record high of $1,943.93. U.S. gold futures gained 1.7% to $1,929.40.
Silver too joined the rally, jumping 5.5% to $24, after hitting its highest since September 2013 at $24.36.
Gold is in “perfect condition to move higher,” said ANZ commodity strategist Soni Kumari, as central banks push for liquidity amid the pandemic.
“Further support is also coming from falling yields, weaker dollar and geopolitical tensions between the U.S. and China. The safe-haven demand (for gold) has been rising while there is none for USD anymore.”
The dollar fell to a near two-year low on increased bets the U.S. Federal Reserve could flag another accommodative policy shift when it meets this week, implying lower interest rates for longer.
China seized the U.S. consulate in Chengdu, retaliating to the closure of its own consulate in Houston.
Meanwhile, COVID-19 cases surged to over 16.13 million globally, driving expectations for more stimulus to stem the economic blow.
“As long as the (virus) situation gets worse, the market is discounting more stimulus for a longer period of time and in bigger quantities,” said Edward Meir, analyst at ED&F Man Capital Markets.
Non-yielding gold is considered a hedge against inflation and currency debasement, with analysts also pointing to massive inflows into gold-backed exchange traded funds as a driver behind its 28% rally in 2020.
However, “strong developments” on the COVID-19 vaccine front and an easing of Sino-U.S. tensions could prompt a correction, ANZ’s Kumari said.
Platinum rose 2.8% to $939.63 and palladium gained 0.4% to $2,227.60.
Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu, Krishna Chandra Eluri and Vinay Dwivedi